Common Exclusions Under Endowment Policies In India

Exclusions are the scenarios in which your service provider i.e., the insurance company you opted for won’t cover certain situations under its umbrella of coverage protection. These are a few pre-mentioned clauses mentioned by the company to make their case for not providing coverage in selected situations.

Let’s take that in and move forward to understand what exclusions are and in particular the exclusions under an endowment plan and understand why it's necessary to note them beforehand.

Common Exclusions Under Endowment Plans

Common exclusions under an endowment plan are mentioned as follows:

• Suicide Exclusion

The cases of death due to suicide are usually not covered under insurance plans, but depending on the plan, the nominee or beneficiary associated with the policyholder might receive at least 80% of the total premiums paid till the date of death, given that policy is in force. This detail might vary depending on the different insurers. Sometimes, death benefits are not applicable under suicide cases. It is crucial that you are familiar with the details before signing up for the policy.

• Participating In Riots And Civil Commotions

Death due to participation in any unlawful activity such as riot, mishaps happening due to participation in unlawful activities won’t be reimbursed by policy as this would mean promoting the unrest in society and would make them complicit.

• Death Due to Drug And Alcohol Consumption 

Death under the influence of narcotics or any other substance won’t be considered as a natural cause it suggests foul play as this could be self-inflicted and pre-determined and thus isn’t accidental. However, the usage under the direct instructions by a medical practitioner is considered an exception.

• Cases of Participation In  Life-Threatening Activities

 Death due to an accident in any type of race activity or any other type of perilous activity. Intentionally putting yourself in a life-risking activity won’t be covered by the insurance provider for promoting the general well-being of the client.

• Pre-Existing Disease

Death due to a pre-existing condition won’t be covered under the protection of insurance as it wrongly rigs the probability of getting the benefits of insurance as the outcome is predetermined.

• Providing Misinformation

It is mandatory to provide accurate information while buying an endowment plan. Any inconsistencies recognised by the insurer might lead to the cancellation of the policy and thereby cancelling all the benefits along with it.

Conclusion

When purchasing an endowment plan, one wishes to secure their future and preplans so that they won’t tremble when troubled waters approach. So, it is an important prerequisite and responsibility of both the client and service provider to make aware of the existing exclusion of the endowment plan as these exclusions are in place to promote the well being of their clients. 

In order to avoid the disappointment that comes along with denial of the claim in time of grief and need, it is advised that the client does the tedious not so attractive work of reading the terms and conditions so that you can determine for yourself and are fully aware of how and when your selected endowment plan would extend its assistance to you.

Also Read: 

Does It Make Sense To Surrender An Endowment Policy?

What Is An Endowment Plan’s Premium?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.